China soy sector threatened by US imports

 

 

Because of the large volume of US soy flooding into China's coastal ports, some domestic soy processing enterprises in China's main soy production areas of Heilongjiang province are facing shutdown.

 

Local industry insiders say, affected by cheap imported soy, domestic soy processing enterprises are once again in crisis.

 

Heilongjiang Yanglin Soybean, Inc. general manager Liu Yulin said its production is off and on. His company is running at a loss processing domestically-grown soy. At present, a tonne of processed soy products sells for only RMB3,500 or so, and the purchase price of domestic soy is RMB3,800-3,900 per tonne.

 

Nie Xiaojun, general manager of a Heilongjiang oil factory has stopped his soyoil crushing plant, as imported soy is too cheap, crushing domestic soy makes the company lose money.

 

Compared with domestics, a major advantage of US soy is the low price. In April, this year, the US soy freight-on-board price is US$379, equivalent to less than RMB3,000 per tonne. Even after shipped to China, the price advantage is still significant.

 

To resolve the critical situation domestic soy processing industry is facing, the China Soybean Industry Association chairman Wan Baorui said that since processing domestic soy in the coastal areas costs RMB170 per tonne more than processing imported soy, he proposes forming cooperatives to achieve large-scale cultivation.

 

Wan also suggests combining specialised soy cooperatives with processing enterprises to link production to sales, creating a win-win situation for farmers and businesses.

 

A report released by USDA said that China's soy imports from 2009-10 could reach 46 million tonnes, and from 2010-11, annual imports will even rise to 49 million tonnes.